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October 31, 2011

Halloween Markets

Filed under: Forex Strategies — Tags: , — admin @ 4:44 pm

A few days after the Euro announcement and the weekend appears to be full of “it won’t work” arguments, which is exactly what TMM expected. But like all good Investment Bank research pieces never combine a price and a time, most of the articles don’t say when. Yes, Europe may well fail, but that doesn’t mean it will do so before Christmas.

The Japanese came back to play again today, bang on schedule with respect to the upcoming G20 meeting. Whilst the market has instantly responded with skepticism citing every other recent failure of BoJ intervention to hold USD/JPY up, TMM congratulate the BoJ on their timing and purpose. Just as the CFTC positioning data showed new recent highs in Yen longs (and even a soothsayer trigger on Friday) they mullered the market. And of course the bonus is this: you print your own currency, sell it for USDs which at some point you then switch to Euros to purchase nice fresh EFSF bonds to bail out Europe, getting big handsome slaps on the back from all for your efforts from your G20 friends. We can’t see anyone in Europe standing in the way of such helpful intervention and, on that basis, can see Europe going very quiet with respect to Chinese currency manipulation charges. First, down to the basic politics of criticizing your benefactor and second, building overseas reserves is exactly what the Europeans want them to do as long as it goes into EFSF.

Italian bonds have been the new focus of stress. Well, if your CDS is useless, you may be having to put on the only true hedge – selling the underlying. But TMM think the *real* reason is that MFGlobal is rumoured to be liquidating its European bond portfolio. Italy’s austerity plan department must be using the same PR company as the banks. Announcing their purchase of the new government fleet of armour-plated Maserati’s is on a par with Barclay’s profit announcement. Not only are they higher than expected, at up 5%, but in announcing that investment banking is down, they are effectively saying “Yes, this has all been made from YOU, Mr and Ms retail St Paul’s Cathedral campsite dweller”. When will they learn humility?

Put the Italy, intervention and natural euro-scepticism creep together and we really aren’t surprised that EUR/USD is lower and the equity bears are taking solace that the path to truth has been embarked upon again. But still TMM are not convinced. Positioning may well have flattened out dramatically as can be seen here (SPX – green line, HFR Equity Market Neutral – yellow line, HFR Macro/CTA – orange line, HFR Global HF – white line)…

…but the mentality is still so far entrenched in the “this is just a bear market rally that we cant see it really turning” we still see another push higher given that it appears that most people missed the 20% rally off the October lows.

Now Today is Halloween.

As TMM are somewhat UK-biased in local traditions, the implementation of this US festival has never really cut it against the age old UK tradition of burning effigies of religious motivated terrorists whilst at the same time having the opportunity to behave irresponsibly with your own explosives at home. Last night saw UK TV start to issue a new trendy version of “don’t play with fireworks” warning, but TMM still feel there is no better way to learn to respect them than to have an old fashioned Jumping Jack firework lodge in your turn ups. But we will bow to popularism and TMM have been selecting their favorite outfits…




As The British Economy Slows, the Sterling Will Continue to Lag

Filed under: Forex News — Tags: , , , , — admin @ 3:09 am

“As The British Economy Slows, the Sterling Will Continue to Lag”

By David Frank, PhD, Chief Market Analyst AvaFX

Last week, The British Pound had a rough time relative to the commodity currencies and its European counterparts. We saw the Sterling falling mostly across the board while only posting gains against the Japanese Yen and the Buck. While the 1.10 percent gain the Sterling had against the Dollar was a good continuation of its rebound, it appears that the Cable will unable to hold above the psychological 1.6000 level. This could be due to the fundamental outlook of the British economy

This coming week, there are three data releases on the economic docket that will weigh on the Sterling. On Monday, consumer credit figures are due for September, and initial estimates forecast a slowdown in household borrowing. According to economists, consumer credit is expected to contract to £0.4 billion from £0.5 billion in August. This is a reversal of the rebound that has been happening since May. Consumer credit remains below its 2011 peak, at £0.8 billion. This is as price pressures have weighed on house borrowing and spending over the course of the year.

Also on Monday housing data is due. The markets will get a closer look at how the British housing sector is developing. While house price data is due the day before, and is forecasted to show a slight improvement, the lending side is not supportive of a recovery. It is in line with the forecasted decrease in consumer credit. Also, mortgage approvals are forecasted to come in at 50.5K. This is down from the prior month’s reading. Still, it is unlikely that the British housing market has bottomed, yet.

The most important release of the week comes on Tuesday, when the Q3 GDP will be released. According economist, the British economy experienced slower economic growth at a pace of 0.4 percent year-over-year, down from 0.6 percent in Q2. Data from the second quarter painted a gloomy picture for the future of the British economy. Exports fell during the second quarter, down 1.3 percent, even as the Sterling was weaker across the board against its European counterparts and the Dollar. Also, the other readings of the recent growth reading were poor: consumer spending dropped by 0.8 percent in the second quarter, while investment rebounded slightly, up 3.8 percent year-over-year.

Other health barometers of the British economy suggest that growth might slow further in the future. Inflation is at a 5.2 percent clip, above the 4.9 percent predicted rate. Recent output data has shown signs of deterioration as well.  This is with industrial production falling by 1.0 percent in August, year over year, and manufacturing data falling short of expectations. It was down to 1.5 percent from 2.6 percent, year over year, in August.

Because of all of these past readings, a lower reading is expected, and a print below the expected figure(s) is also not out of the question.

for more information on forex trading please visit us at Ava.


Trading Week Outlook: Oct. 31 – Nov. 4

Filed under: Business — Tags: , , , , — admin @ 12:29 am

Oct. 30, 2011 ( – With many unknowns still lingering after the rally fueled by the EU Summit’s new plan to contain the sovereign debt crisis, the first trading week of November could prove crucial for the fate of the financial markets, the euro and the U.S. dollar as the G20, the Fed and the European Central Bank convene to chart the direction of their future policies.

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.

1.    EUR- Euro-zone HICP- Harmonized Index of Consumer Prices, the main measure of inflation preferred by the European Central Bank, Mon., Oct. 31, 6:00 am, ET.

Following the surprising spike in inflationary pressures to 3.0% y/y in September from 2.5% y/y in the summer months, the Euro-zone’s main inflation gauge is forecast to show consumer prices holding up near the 3.0% y/y level with a preliminary estimate of 2.9% y/y in October. The inflation spike came only a week before the European Central Bank’s October meeting and was one of the factors keeping the central bank from cutting rates then. However, if inflation slows along with the Euro-zone’s economy, the odds of an ECB rate cut will increase exponentially.

2.    AUD- Reserve Bank of Australia Interest Rate Announcement, Mon., Oct. 31, 11:30 pm, ET.

Last week’s unexpectedly hawkish Reserve Bank of New Zealand stance shocked the markets as New Zealand’s central bank begged to differ from all other major central banks which have made it clear that they are steering further away from tightening in an effort to stimulate growth. Although the Reserve Bank of Australia would be likely to keep the benchmark rate at the current 4.75% level, even the slightest hint of a similar to the Reserve Bank of New Zealand’s view that rates might need to be adjusted higher at some point in the future, could serve as a catalyst for further strengthening of the Australian dollar. On the other hand, a dovish Reserve Bank of Australia statement, opening the door to rate cuts, would be a major risk factor for the higher-yielding commodity currency “down under”.

3.    GBP- U.K. GDP- Gross Domestic Product, the main measure of economic activity and growth, Tues., Nov. 1, 4:30 am, ET.

Growing by only 0.1% q/q in Q2 2011, the U.K economy is forecast to regain momentum by up to 0.4% q/q in the third quarter of 2011. The GBP could enjoy a bit of a boost on stronger Q3 growth, provided the recent risk rally continues to distract the market from the fact that the Bank of England expanded its Asset Purchase Program by 75 billion pounds and is in the process of doing more quantitative easing.

4.    USD- U.S. ISM Manufacturing Index, a leading indicator of industrial activity, where a reading above or below 50 is the dividing line between economic expansion and contraction, Tues., Nov. 1, 10:00 am, ET.

The U.S. manufacturing sector index is forecast to gain strength for another month with a reading of 52.2 in October from 51.6 in September, continuing the sequence of cautiously optimistic U.S. economic data ahead of the Fed’s monetary policy announcement.

5.    USD- U.S. ADP-Automatic Data Processing Employment Report, a measure of jobs lost or added to the private sector of the economy, also serving as a leading indicator for the outcome of the monthly non-farm payrolls, Wed., Nov. 2, 8:15 am, ET.

In a prelude to Friday’s employment report, payrolls in the private sector of the U.S. economy are expected to register an increase by up to 114K in October compared with the 91K new payrolls added in September.

6.    USD- U.S. FOMC- Federal Open Market Committee Interest Rate Announcement, Wed., Nov. 2, 12:30 pm, ET.

The recent U.S. dollar weakness was fueled not only by the return of risk appetite but also by increased QE3 market speculation. Some members of the FOMC have been “warming up” to the idea of more quantitative easing and even calling for it. Although QE3 is not completely out of the picture yet, the Fed might decide that the prudent thing to do at the moment is to acknowledge the recent signs of improvement in the U.S. economic backdrop and to allow a few more months to asses the impact of “Operation Twist” before they take on additional asset purchases at the expense of the U.S. dollar. If the Fed rules out QE3, the greenback could start correcting some of its recent losses.

7.    EUR- G20 Meeting of finance ministers and central bankers of the world’s twenty most industrialized nations, Thurs., Nov. 3 and Fri., Nov. 4, all day events.

Scheduled to serve as another deadline to work out more details of the EU debt crisis-fighting plans, the G20 meeting participants will examine closely all aspects of the promised comprehensive solutions and will ask for fast implementation, while the EU reps try to pass the tin can asking for contributions to the EFSF bailout fund, which is about 750 billion euro short of its proposed 1 trillion size. The EU leaders hope for a significant Chinese participation in EFSF, but with China making it very clear that they want guarantees and that they should not be viewed as a “source of dumb money”, the G20 meeting will be a spectacle worth watching.

8.    EUR- European Central Bank Interest Rate Announcement, Thurs., Nov. 3, 8:45 am, ET.

With plans to contain the EU debt crisis and the ECB involvement still being discussed, President Trichet leaving and the new President Draghi taking over, the European Central Bank would have the difficult task to navigate through a sea of uncertainty. To add to the difficult situation, the Euro-zone economy is slowing, while inflationary pressures have unexpectedly spiked. What is the central bank to do- cut rates to help the economy avoid a double dip or keep rates high to curb inflation? Considering his past record, Mr. Trichet would have preferred the latter option, but the new ECB President Draghi may have something else in mind. Should the ECB announce, or at least open the door, to an impending rate cut, the EUR could see selling pressures building up quickly, especially if the Fed has ruled out QE3 the day before the ECB meeting.

9.    USD- USD- U.S. ISM Non-Manufacturing Index, a leading indicator of economic conditions in the services industries: agriculture, mining, construction, transportation, communications, wholesale trade and retail trade, Thurs., Nov. 3, 10:00 am, ET.

Just as the manufacturing sector, the U.S. services industry activity is forecast to expand for another month with an ISM Non-Manufacturing index reading of 53.5 in October from 53.0 in September.

10.    USD- U.S. Non-Farm Payrolls and Employment Situation Report, one of the most important indicators of economic health, measuring the number of new jobs created or lost in the world’s largest economy, Fri., Nov. 4, 8:30 am, ET.

The most important of all U.S. economic data will hit the newswires in the aftermath of the FOMC and the ECB interest rate announcements and in the midst of a G20 meeting. Kick-starting the market’s quest throughout October to find out if the U.S. economy is really as bad as the Fed’s gloomy outlook painted it to be ahead of the FOMC meeting on November 1-2, the previous Non-Farm Payrolls report managed to instill some cautions optimism with the U.S. economy adding 103,000 jobs in September, compared with a sequence of dismal employment reports throughout the summer. The trend of positive job creation is expected to continue with the U.S. economy adding up to 95,000 jobs in October, while the unemployment rate remains unchanged at 9.1%. Consistent improvement in the U.S. economy and labor market, coupled with signs that the EU leaders may be able to put out the fire from the debt crisis, while the ECB cuts rates to help the euro-area economy avoid a double dip, should steer the Fed further away from QE3 and could become the formula for a U.S. dollar relief rally.

October 30, 2011

Monetary Policy Week in Review – 30 Oct 2011

Filed under: Forex News — Tags: , , , , — admin @ 3:09 am

The past week in monetary policy saw 15 central banks announce interest rate decisions.  Those that increased interest rates were: India +25bps to 8.50%, and Mongolia +50bps to 12.25%, while those that decreased interest rates were: The Gambia -100bps to 14.00%, Sierra Leone -300bps to 20.00%, and Georgia -25bps to 7.25%.  Also announced was Angola’s central bank setting its new benchmark interest rate at 10.50%.  The central banks that held interest rates unchanged were: Israel 3.00%, Canada 1.00%, Hungary 6.00%, New Zealand 2.50%, Japan 0-0.10%, Russia 8.25%, Namibia 6.00%, Sweden 2.00%, and Colombia 4.50%.  Also in the news was the Bank of Japan announcing a 5 trillion yen addition to its quantitative easing program.

With just two months left in the year this week’s summary chart shows a good representation of monetary policy this year. The key word of course is diversity. On the one hand there is developed markets with unusually low interest rates (and low growth and low inflation pressures). While on the other hand is the emerging and developing markets with much higher interest rates (and relatively higher growth rates and inflationary pressures). Even within developing economies there is diversity in the trajectory of interest rates as some begin to feel the pinch of policy tightening, paired with the deteriorating outlook in western economies, and in particular the ongoing sovereign debt issues in Europe (short-term crisis-containment measures notwithstanding).

Some of the key quotes from the monetary policy makers are included below:

  • Reserve Bank of India (increased rate 25bps to 8.50%): “both inflation and inflation expectations remain high. Inflation is broad-based, and is above the comfort level of the Reserve Bank. We expect these levels to persist for two more months. There are potential risks of expectations becoming unhinged in the event of a pre-mature change in the policy stance. However, reassuringly, momentum indicators, particularly the de-seasonalised quarter-on-quarter headline and core inflation measures, indicate moderation. This is consistent with the projection that inflation will decline beginning December 2011.”
  • Bank of Japan (added 5 trillion to QE): “some more time will be needed to confirm that price stability is in sight and due attention is needed for the risk that the economic and price outlook will further deteriorate depending on developments in  global financial markets and overseas economies.  While steadily implementing its decision in August to enhance monetary easing, especially through the purchase of financial assets, the Bank deemed it necessary to further enhance monetary easing so as to ensure a successful transition to a sustainable growth path with price stability.”
  • Central Bank of Russia (held rate at 8.25%): “Considering recent domestic and international macroeconomic developments and the effect of the monetary policy measures, implemented in recent months, the Bank of Russiajudged that the current level of money market interest rates is appropriate to balance the inflationary risks and the risks of economic growth slowdown in the nearest future”
  • Bank of Mongolia (increased rate 50bps to 12.25%): “The rapid expansion of budget expense, cash hand-out from the Human Development Fund and the high increase in loans are contributing to higher demand. This sharp increase in demand builds the pressure on core inflation even the total supply and the real capacity of economy have not added on yet. The consecutive growth in prices of non-food products from the beginning of 2011 and the current stand in yoy 11.3% prove that the increase of total demand is bringing the growth of core price.”
  • Riksbank (held rate at 2.00%): “The difficulties in resolving the public finance crisis in Europe has led to increased uncertainty regarding the future. In Sweden, growth is expected to be slightly weaker in the coming period. At the same time, inflationary pressure is low. The Executive Board of the Riksbank has therefore decided to hold the repo rate unchanged at 2 per cent and to wait to increase it until sometime next year.”
  • Bank of Canada (held at 1.00%): “The global economy has slowed markedly as several downside risks to the projection outlined in the Bank’s July Monetary Policy Report (MPR) have been realized. Financial market volatility has increased and there has been a generalized retrenchment from risk-taking across global markets. The combination of ongoing deleveraging by banks and households, increased fiscal austerity and declining business and consumer confidence is expected to restrain growth across the advanced economies.  The Bank now expects that the euro area—where these dynamics are most acute—will experience a brief recession.” 
  • Reserve Bank of New Zealand (held rate at 2.50%): “Given the ongoing global economic and financial risks, it remains prudent to continue to keep the OCR on hold at 2.5 percent for now. However, if global developments have only a mild impact on the New Zealand economy, it is likely that gradually increasing pressure on domestic resources will require future OCR increases.”

Looking at the central bank calendar, next week will be a very interesting week in central banking with the very important US Federal Reserve and European Central Bank both announcing monetary policy decisions.  All eyes will be focused on whether the US FOMC announces or hints at any further quantitative easing; meanwhile people will be watching to see if the new ECB president, Mario Draghi, decides to cut the interest rate or provide any other supportive measures to aid the faltering Eurozone economies.

  • AUS – Australia (Reserve Bank of Australia) expected to hold at 4.75% on the 1st of Nov
  • ISK – Iceland (Central Bank of Iceland) expected to hold at 4.50% on the 2nd of Nov
  • USD – USA (Federal Reserve) expected to hold at 0-0.25% on the 2nd of Nov
  • CZK – Czech Republic (Czech National Bank) expected to hold at 0.75% on the 3rd of Nov
  • EUR – Eurozone (European Central Bank) expected to hold at 1.50% on the 3rd of Nov


Article source:

Forex Market Outlook 10/28/11

Filed under: Business — Tags: , , , — admin @ 12:33 am

Yesterday’s meteoric ride higher in risk assets is emblematic of the overall state of the global economy in that it is government and not business that is holding us back.  With the “resolution” of the Euro debt crisis having been established, let’s not forget that the debt problem is not going to go away, but rather now they have a coherent plan to deal with it.  That is, until something happens.

Part of the problem with the plan laid out yesterday is that it did not address the debt problems in the other four periphery countries and while Greece may live to see another day, the people of Italy, Ireland, Portugal, and Spain may take issue that they did not receive debt forgiveness.  So this situation is far from over, and it will be interesting to see what happens when the it comes time to actually follow through on these plans if necessary.

So the major risk appetite from yesterday has abated some today as we some profit-taking in the markets ahead of the weekend.  Risk assets are slightly lower to start the morning, but not enough to show a reversal of sentiment.  Moves like yesterday’s are rarely one-day phenomena so it seems likely that barring some extremely bad news, markets particularly US stocks should move higher.  The Dow climbed above 12000 and corporate earnings have continued to impress. 

This rise in stocks yesterday was both accompanied and caused by US dollar selling, as the Dollar experienced a broad-based sell-off and commodities were higher as well.  Economic data has been slightly better of late, but it will be interesting to see if this is sustainable with the potential inflation on the horizon.

There was no significant news out of Europe this morning, but overnight in Japan the jobless rate came in much better than expected, posting a 4.1% figure vs. an expectation of 4.5%.  Household spending also decreased by less than expected, and CPI data showed continued deflation.  Industrial production figures however were worse than expected.

So the story in Japan is one of an improving economic picture despite the recent Yen strength which is at an all-time high vs. USD.

Economic data released here in the US missed expectations slightly with Personal Income showing a .1% gain vs. the expected .3%, though personal spending increased .6% as was expected.  Later this morning the U of Michigan consumer confidence figure will be released and is unlikely to bet expectations.

Today is setting up to be an inside day which is not surprising given yesterday’s massive move.  Essentially this means that we won’t be making new highs or new lows.  These types of pauses are generally necessary as it gives the markets time to fully digest the impact of the change in sentiment and determine if the move is warranted.

In this case I think it is, not because the economic fundamentals looks so good, but because there really is no place else to go.  With bonds paying little interest, the value of the Dollar declining, and global growth uncertain, stocks are a pretty good place to be.  The rationale behind it is that companies can maneuver more quickly than governments and can maintain earnings but cutting spending if need be.  With valuations fairly low historically, dividend yields are higher making stocks an attractive bet.

But what’s even a better bet are the commodity currencies in my opinion as dividends are paid quarterly in stocks; in currencies interest is paid daily.  So you don’t have to try to pick individual winners like in stocks or get locked up for months waiting for dividends.  You can get in and out in a moments notice and get your interest daily.

In addition, if the Dollar continues to weaken with the threats of QE3 on the horizon, then other currencies are going to look more attractive.  That’s what makes the currency market the market of choice for these uncertain times!



October 29, 2011

The Fund

Filed under: Forex Strategies — Tags: — admin @ 4:44 pm

A quick intrapost post..

After stumbling across  John Donne’s “The Flea” last night, it struck us that things really don’t change over the centuries. So, with that in mind here is Sarkozy’s lament to Merkel over the EFSF.

The Fund

Mark but this fund and market this,
How little that which thou deniest me is ;
It suck’d me first, and now sucks thee,
And in this fund our two bonds mingled be.
Thou know’st that this cannot be said
A sin, nor shame, nor loss of ratings led;
Yet this enjoys before it woo,
The Chinese to swell one bond made of two ;
And this, alas ! is more than we could do.

O stay, three lives in one fund at par,
Where we almost, yea, more than married are.
This fund is you and I, and this
Our marriage bed, and fiscal union is.
Though public grudge, and you, we’re met,
And cloister’d in these rules we set.
Though use make you apt to kill me,
Let not to that self-murder added be,
And sacrilege, three sins in killing three.

Cruel and sudden, hast thou since
Defaulted thy bond, in plea of innocence?
Wherein could this fund guilty be,
Except in that buck which it suck’d from thee?
Yet thou triumph’st, and say’st that thou
Find’st not thyself nor me the weaker now.
‘Tis true ; then learn how false fears be ;
Just so much honour, when thou yield’st to me,
Will waste, as this funds death took life from thee.

Italian Bond Sale Disappoints – Debt Haircut Rumors Persist

Filed under: Forex News — Tags: , , , , , , , — admin @ 3:15 am

With the announcement earlier this week that a deal to help contain the Eurozone debt crisis was in the works, attention quickly shifted from Greece to Italy. Compared to Greece, Italy’s debt situation is only marginally better with a debt to GDP ratio of 116 percent as of the end of 2010, compared to Greece’s 145 percent debt to GDP ratio.

Debt ratios aside, the greater concern is that at just over $2 trillion, Italy’s economy is more than six time larger than the Greek economy. The cash reserves required to meet Italy’s considerably greater debt could prove beyond the capabilities of the Eurozone should it be necessary to assume Italy’s debts directly.

On that front, Italy held an auction on Friday just days after the Eurozone debt deal was announced. With the euphoria of the Eurozone covenant still buoying markets, the auction was expected to follow the same trend. Unfortunately, it did not.

Italy had committed 8.5 billion euros ($11.9 billion) to the auction but only managed to find buyers for 7.93 billion euros. Worse still, the yield on benchmark ten-year notes rose to 6.06 percent. This is the highest Italy has been forced to offer on ten-year notes since the launch of the Eurozone in 1999 and suggests investor skepticism for Italy’s ability to repay its debt remains high.

During the past few weeks, Italy has been downgraded by the three leading ratings agencies. Standard and Poor’s was the first to question Italy’s ability to repay existing debt noting the government’s poor track record and its habitual over-spending. With the slowing economy, the government’s inability to manage its finances will worsen unless the government takes its commitment to balancing its budget more seriously.

With nearly $300 billion euros ($421 billion) in maturing debt due for repayment alone next year, uncertainty persists in Italy’s ability to meet its obligations. This has given rise to speculation that some form of debt revaluation similar to that arranged for Greece will also be necessary for Italy as well.

Scott Boyd is a currency analyst and a regular contributor to the OANDA MarketPulse FX blog

Noted China Bear at it Again

Filed under: Forex News — Tags: , , , — admin @ 3:09 am

Jim Chanos, a U.S.-based hedge fund manager well-known for his negative outlook for China, told a television audience on Friday that China’s economy is about to enter a period of significant contraction. Chanos has long held the belief that the event to trigger the collapse will be a sharp decline in property values.

At his most animated, Chanos describes China’s situation as a thousand times worse than the property collapse that struck Dubai in 2009. Chanos maintains that China’s growth has been achieved on the coat-tails of a rapidly expanding property bubble that is now showing real signs of bursting. As evidence, Chanos points to a nationwide survey of home prices for September. The survey indicates that home prices rose in fewer than half of the 70 cities included in the report.

It is necessary to note, however, that the Chinese government has deliberately attempted to ease the rate of property value appreciation. To date, this has been managed through efforts to quell property speculation. New rules have been implemented to make it more difficult to borrow money to buy a second property while credit has been frozen in the banking system by raising the minimum reserve requirements that commercial banks must maintain.

Understandably, not all analysts are in agreement with Chanos. Stephen Roach of Morgan Stanley Asia noted recently that the pullback in property values is due to government efforts to cool property value increases. This simply confirms that these efforts are working says Roach who believes fears that China is headed for a hard landing are “overblown”.

Scott Boyd is a currency analyst and a regular contributor to the OANDA MarketPulse FX blog

Dollar Below Support, EURUSD Jumps Well Above 1.4

Filed under: Technical Analysis — Tags: , , , , , , — admin @ 3:05 am

Quote of the day:“Time has a wonderful way of showing us what really matters.” ~ Margaret Peters Good morning. Dollar breached horizontal support yesterday as the euro rallied to as high as $1.4245 from a session low at $1.3865 on euro-zone deal optimism. Large swings can be seen all over the place so let’s take a Read More

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Article Source | Post tags: AUDJPY, AUDUSD, Australian Dollar, breakout trading, Dollar, EU Summit, Euro, Euro-zone crisis, EURUSD, Japanese Yen, usd index

Daily Forex Fundamentals – October 28, 2011

Filed under: Currency Charts — Tags: , , , , — admin @ 1:28 am

What’s on the Economic Horizon
Japanese household spending down by 1.9% y/y
Swiss KOF economic barometer due today
UoM consumer sentiment to improve in Oct

U.S. Dollar (USD)

The U.S. dollar lost ground to its major counterparts as risk appetite popped its head back in the markets yesterday. USD/JPY dipped to a new low of 75.66 while EUR/USD soared past the 1.4000 handle to a high of 1.4248. Will the Greenback take another beating from the higher-yielding currencies today? Read more…

Euro (EUR)

“Wow.” That’s really all you can say after seeing the euro’s price action yesterday. For the first time since early in September, EUR/USD traded above the 1.4200 handle. The euro posted a 281-pip gain against the dollar after European Union officials finally announced their rescue package. Will the euro extend its gains today? Read more…

British Pound (GBP)

The currency bulls partied in the streets yesterday, and the pound bulls definitely had a good time! While EUR/GBP rose by 107 pips to .8813, GBP/USD also went up by 125 pips to 1.6097. GBP/JPY even went from an intraday low of 121.13 and finished the day at 122.24! Read more…

Japanese Yen (JPY)

Boo hoo! The Japanese yen got clobbered by its higher-yielding counterparts as risk appetite surged yesterday. Its only win was against the safe-haven U.S. dollar as USD/JPY closed 4 pips below the 76.00 handle. Read on to find out whether the yen could get back on its feet today or not. Read more…

Canadian Dollar (CAD)

Now that’s how you execute a 1-2 punch! The Loonie followed up its awesome performance on Wednesday with an equally impressive 135-pip rally against the Greenback. In the end, the USD/CAD closed below parity at .9913. Booyeah! Read more…

Australian Dollar (AUD)

Surf’s up, mate! The Aussie rode the wave of risk appetite like a boss yesterday, with AUD/USD catching more than 300 pips in gains. AUD/JPY was also able to take advantage of the risk rallies as it closed more than 200 pips up from its 79.29 open price. Read more…

New Zealand Dollar (NZD)

Wham, bam, thank you risk appetite! Thanks to the debt deal reached by the European leaders, NZD/USD rocketed by 262 pips and capped the day at .8206. Boo yeah! Read more…

Swiss Franc (CHF)

It was a day of pip-giving for the currencies yesterday, and, strangely enough, the franc was no exception! While USD/CHF’s 203-pip plunge to .8807 is not surprising for many, EUR/CHF also slipped by 41 pips and closed at 1.2210. Read more…

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!

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